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what is the formula for book value per share. Book value is equal to a companys current market value divided by the book value of all of its shares. The calculation of its book value per share is.
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If the investors can find out the book value of common stocks she would be able to. Also since youre working with common shares you must subtract the preferred shareholder equity from the total equity. Book Value per Share Shareholders Equity Preferred Equity Total Outstanding Common Shares.
So you have to deduct the total shareholder equity with preferred shares.
If company has issued only common stock and no preferred stock. The book value per share is the value each share would be worth if the company were to be liquidated all the bills paid and the assets distributed. Otherwise the book value per share would be inflated and inaccurate. Book value per share is determined by dividing common shareholders equity by total number of outstanding shares.
